The following questions concern internal controls, and the testing of internal controls, in the inventory and warehousing cycle. Choose the best response. 

a. For control purposes, the quantities of materials ordered may be omitted from the copy of the purchase order that is 

(1) Returned to the requisitioner. 

(2) Forwarded to the receiving department. 

(3) Forwarded to the accounting department. 

(4) Retained in the purchasing department’s files. 

b. For several years, a client’s physical inventory count has been lower than the amount shown on the books at the time of the count. Contributing to the inventory problem could be material weaknesses in internal control that led to failure to record some 

(1) Purchases returned to vendors. 

(2) Sales returns received. 

(3) sales discounts allowed. 

(4) Cash purchases. 

c. Which of the following internal control procedures most likely would be used to maintain accurate inventory records? 

(1) Perpetual inventory records are periodically compared with the current cost of individual inventory items. 

(2) A just-in-time inventory ordering system keeps inventory levels to a desired minimum. 

(3) Requisitions, receiving reports, and purchase orders are independently matched before payment is approved. 

(4) Periodic inventory counts are used to adjust the perpetual inventory records.